2.3.5 What is the Term of the License?

Under FPA section 6,[1] each license must have a stated term of years.  Starting on license issuance, the term runs between 30 and 50 years.[2]  At the end of the stated term, the licensee must undertake the relicensing process described in Section 3.2.

As a rule of thumb, FERC generally grants a term of 30 years in a new license which includes few operational or capital improvements, 40 years for some operational but no capital improvements, and 50 years for operational and capital improvements. [3] 

License term is an important issue in settlement negotiations.  Because of the value of a longer license term, a licensee may be willing to negotiate more costly environmental conditions in exchange for a longer license term.

[1]               16 U.S.C. § 799.

[2]               See id. (“Licenses under this subchapter shall be issued for a period not exceeding fifty years.”).  See also 16 U.S.C. § 808(e).

[3]               See, e.g., Ford Motor Company, 110 FERC ¶ 61,236, (Mar. 4, 2005).